Are you applying for a credit card for the first time? Well as someone who has never had a credit card before, you may be in for a challenging situation. From the numerous options in the market today, how do you pick the one starter credit card that would best fit your every need? Do you have time to sort through all the crucial information – annual fees, interest rates, fees, rewards etc.? Have you heard about the myths surrounding credit cards and credit scores?
Indeed, getting your first credit card is a huge step towards financial independence. It will give you the power of payment convenience, no need to carry cash all the time, build credit history, and attend to financial emergencies right away. This quick guide should help narrow your search, so you can make the best decisions without having to work your way through a mountain of information.
Once you’ve evaluated your financial situation, carefully considered the risks and benefits, and set a budget, it’s time to look at your options.
In general, what types of credit cards are there?
For starters, credit cards usually offer Rewards points, cash back, promos and discounts. Depending on your lifestyle, you could go for credit cards that offer more rewards, more cash back (rebates), or more mileage. For credit cards that offer Rewards, this could be exchanged usually for shopping/dining gift certificates. Mileage credit cards offer points which could be automatically converted to the Frequent Flyer Program points. While those that offer cash back, it gives rebates for a specific type of store or merchant category (e.g. groceries, drug stores, hotels/restaurants).
But if you are looking for more than this. AUB has something better to offer, especially for those who want to build good credit history. AUB Credit Cards are great for first-time cardholders, as it would help you manage your spending by giving you the option to control important aspects of your credit card bill: (1) how often to pay (from fixed monthly, semi-monthly or weekly) (2) exactly when to pay (between 1st to 30th (monthly payments), 15 pre-defined due dates (for semi-monthly payments); and Mondays to Sundays (for weekly payments) and (3) how much to pay, from Php250 to Php3,000 (for Easy) and from Php1,000 to Php9,000 (for Classic).
How will I be qualified to avail of a card?
Credit cards have certain age requirements. Most banks require applicants to be at least 21 years old to apply. There are also certain gross annual income requirements which vary depending on the type of card and the applicant’s employment status. You will be required to submit documentation—government issued IDs or employment IDs, and income documents such as your latest payslips, income tax return, and certificate of employment. If you’re self-employed you should have your DTI registration and latest financial statements along with your ITR.
What else should I consider?
Aside from checking out the credit cards’ latest promos (which only runs for a specific period), it is also more important to consider the credit cards’ Features and Benefits (which is most likely not subject to frequent changes)
You will see that some of the best cards have really low interest rates and no annual membership fees. Their monthly interest will be based on your average daily balance (ADB) from beginning to the end of your statement cycle— interest shall apply when you pay only the minimum amount or any amount less than the total balance. And if you’re unable to keep up with the minimum payments, a certain late payment fee may be charged every billing that the balance is past due.
When it comes to the billing schedule, there are some basic questions you should ask.
- Does the card have a standard monthly billing cycle?
- Can you choose a specific date for the payments?
- Is there a penalty if the card isn’t used over a certain period of time?
We recommend choosing a credit card with simple payment terms. You should have the freedom to decide when and how much you want to pay. Fortunately, cards with these advantages are not hard to find, and the experts at Loansolutions are always ready to help you in that regard. You can also check out this infographic about credit cards in the Philippines for more info.
Ultimately, getting the best credit card is largely a matter of finding an issuer that understands your needs. Knowing this, we are always on our toes, striving to help our clients connect with leading banks that not only offer the best loan options—but also specialize in the best starter credit cards with no annual fees or no interest on new purchases. Don’t hesitate to get in touch with for free financial assistance.